Oracle Cloud Revenue Doubles; Stock Jumps 7%
Oracle Cloud Revenue Doubles; Stock Jumps 7%
The News
Oracle beat Wall Street's revenue estimates for its fiscal first quarter on Thursday, driven by companies spending heavily on artificial intelligence, and raised its profit forecast for the year.
Revenue rose 30% to $19.3 billion, ahead of the $19.14 billion analysts expected, according to LSEG data cited by Reuters. Shares rose in extended trading — up about 7%, CNBC reported, and nearly 6% by Reuters' count.
The quarter ended Aug. 31.
The Numbers
Cloud infrastructure revenue more than doubled to $7.4 billion, beating a $7.09 billion consensus, CNBC reported. Total cloud revenue rose 62% to $11.6 billion.
Net income was $4.68 billion, or $1.56 per share, up from $2.93 billion, or $1.01 per share, a year earlier.
Revenue backlog — contracted but unrecognized revenue, deferred revenue and uncollected invoices — stood at $664 billion, up from $638 billion three months earlier and above analyst estimates near $630 billion to $640 billion.
Software revenue was the weak spot at $5.5 billion, down 3% and short of estimates.
Data center capacity brought online during the quarter: 850 megawatts.
Timeline
S&P Global downgrades Oracle's credit rating, citing weak cash flow and rising business risk, Reuters reported.
Oracle brings 850 megawatts of data center capacity online, announces AI agents for human resources teams and lands a Pentagon contract worth up to $7 billion over a decade.
Fiscal first quarter ends.
Oracle reports the results after the close; shares jump in extended trading. Executives take analyst questions on a 5 p.m. ET call.
Reactions
The Financial Times framed the quarter as Oracle's AI strategy accelerating, noting the database company raised its data center revenue forecast alongside a huge increase in capital spending as it tries to compete with larger rivals.
Bloomberg said the cloud growth suggests Oracle's large AI data center projects are feeding through to its financial results.
The bearish read came from ZeroHedge, which credited the beat to massive capital expenditure and soaring debt and predicted the initial spike in the shares "may not last once the algos start fading the initial euphoria."
Oracle said in its statement that new AI contracts will not change its plans to raise capital.
What's Next
For the current second quarter, Oracle guided to revenue growth of 30% to 34% and adjusted earnings of $1.85 to $1.93 per share — roughly in line with what analysts expected.
For fiscal 2027, the company now sees adjusted earnings of $8.10 per share, up from a prior $8.05 forecast, on at least $90 billion in revenue.
The open question for investors is when the capital spending starts producing positive free cash flow, and whether reported build-out delays on the Stargate data center project — tied to labor, permitting and power availability, per Reuters — push revenue further out.
More
Even after Thursday's pop, Oracle stock is down more than 20% in 2026 — off 22% as of Thursday's close, CNBC reported, against a roughly 11% gain for the S&P 500. The selling has tracked investor worry about capital spending eating into free cash flow.
Oracle has a weaker cash position and a lower credit rating than the hyperscalers it is chasing: Amazon, Microsoft and Google.
Poll
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